Active or Passive Enrollment, Which Is Right for You?

MyTPG Blog
Published: 07/13/21 5:00 AM

Title image for Active or Passive Enrollment, Which Is Right for You? showing an "open" sign hanging from a door at a place of business.

Active or Passive Enrollment, Which Is Right for You?

This article was published on: 07/13/21 5:00 AM

Often both employers and employees feel the stress during the busy time of the year that is open enrollment. It’s precisely during this time that employees can enroll in a new health plan or adjust their current one as needed. While you always have to account for differences in each employer’s open enrollment, generally speaking there are 2 types of open enrollments: active or passive.

  • Active: To enroll in the following year’s benefits, employees need to act.
  • Passive: It’s not necessary for employees to act in order to enroll in next year’s benefits.

Both enrollment types are effective, however active enrollment demands much more time and effort on your part to have a successful enrollment period. And, regardless of the measures you put in place to assist employees in the process, inevitably some will forget to check the box or make necessary adjustments. This is where passive enrollment is your friend since you can enroll them using the previous years’ choices.

Passive Enrollment Benefits

With passive enrollment, employees have 2 options:

  1. Not participate in the enrollment process, or
  2. Select a box which utilizes the same choices from the previous year and therefore be covered.  

Passive enrollment benefits you since there are very few administrative tasks, which will save you time. A major benefit for your employees is that they will be less stressed out since it’s a streamlined process and, unless they opt out, they will have health insurance coverage.

Things To Watch Out for With Passive Enrollment

It is believed by some experts that passive enrollment can be more costly both to the employee and you, the employer, later down the road since the employees aren’t educating themselves as much as they would if the enrollment was active. This lack of education leads to the employee not truly evaluating if the previous years’ choices fit their past needs and if it’s a good fit for the upcoming year.

In Conclusion…

Whichever option you choose, active or passive enrollment, employees should never be left without the educational materials they need to make the best health care decisions for themselves and their families.

Get in touch with TPG Payroll & HR Services for more information. Just call 909.466.7876 today or read more about our Benefits Administration – A Better Benefits Experience and become acquainted with the services we have to offer!